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National Australia Bank forecasts modest recovery in Newcastle thermal coal prices in coming quarters

Source: Google, August 16, 2019

National Australia Bank is forecasting steady growth in thermal coal prices though to July-September next year after a retreat in the current quarter, but prices are not expected to return to the levels seen earlier in 2019, National Australia Bank said Wednesday in its monthly Minerals and Energy Outlook.

The Australian bank expects the FOB Newcastle price basis 6,000 kcal/kg NAR to average $68/mt over July-September, down from $78/mt in the previous quarter, then rise steadily to average in $78/mt FOB Newcastle over July-September next year.
Prices were then tipped to ease back to $70/mt FOB Newcastle by October-December 2021.

"It is unclear how strict is a proposed quota on Chinese coal imports [limiting the full year total to 281.5 million mt, the same volume as 2018] as this would result in a significant slowdown for the remainder of this year," the bank's analysts said in the report.

"India plans to cut coal imports by at least one third over the next five years, which would significantly reduce global demand over this period," it added.

Despite the forecast uptick over the coming quarters, prices are expected to remain well below the $95/mt FOB Newcastle averaged over January-March. In addition, the full year thermal coal price in 2020 is expected to be $76/mt, down from $79/mt in 2019, the analysts said in the report.

News Source: S&P Global